http://www.bennetlaw.com/practice_area.php?id=47&article=625
03/10/2006
TracFone Obtains Permanent Injunction Against Handset “Unlockers”
The United States District Court for the Southern District of Florida (Federal Court) has ordered Sol Wireless Group, Inc. (Sol) to immediately and permanently halt “unlocking” TracFone Wireless Inc. (TracFone) pre-paid cell phones. Handset “locking” involves encrypting a handset so that the handset is not functional on another carrier’s network unless a key code is entered to unlock the phone. In its complaint Tracfone argued that Sol was engaged in an unauthorized and illegal wireless telephone business where Sol was purchasing large numbers of pre-paid handsets, altering the handsets’ software computer code to “unlock” the handset from being tied to TracFone’s network and then reselling the handsets as new for use on other wireless carriers’ networks. The Federal Court’s order came as a direct result of a settlement reached between the parties whereby Sol was enjoined from: (1) purchasing or selling any wireless mobile phone bearing the TracFone trademark; (2) altering or unlocking any TracFone handsets, or assisting anyone with altering or unlocking TracFone handsets; (3) using the TracFone trademark; and (4) misrepresenting used products as new or misrepresenting that TracFone warrants the used and/or re-conditioned phones. Any violation of the permanent injunction by Sol could lead to the imposition of penalties of up to $5,000 per phone.
Terror Charges Dropped Against Two Cell Phone Suspects
Prosecutors In Michigan Stand By Charges Against Three Others
http://www.clickondetroit.com/news/9682097/detail.html
DETROIT -- Federal authorities told local law enforcement last winter to be on the lookout for people buying large numbers of prepaid cell phones. Authorities in Michigan and Ohio were clearly listening: They arrested five men doing just that last week and charged them with terrorism-related offenses.
But on Monday, an Ohio prosecutor said he was dropping the charges he brought against two Dearborn men because he could not prove a terrorism link. Supporters of the five men have said all along their only purpose was to make money through a perfectly legitimate business and that they were targeted because of their Arab descent.
Prosecutors in Michigan were standing by the charges against three Texas men, though they have not said what they believe the men intended to do with the phones. The men's lawyer said he believed they too were wrongly targeted.
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TracFone Wireless Inc. sells prepaid cell phones at major retailers like Wal-Mart. The Nokia or Motorola handsets are heavily subsidized and come with limited minutes. The company makes money when customers purchase additional minutes from TracFone.
In a statement, Miami, Fla.-based TracFone said it was aware that people buy the phones in bulk in order to remove the TracFone software -- often called "unlocking" a phone -- and resell the handsets.
The modified handsets can be used with any cellular provider, not just TracFone, said Michael Vargas, a 26-year-old New Yorker who said he is in the business of buying and reselling the phones. Wal-Mart and other stores sell the TracFones for about $20, he said.
The company believes the practice violates its intellectual property, spokesman Derek Hewitt said. He said the company has brought civil lawsuits in some instances.
There has been no definitive court ruling on the legality of unlocking phones. Consumer advocates maintain locking the phones in the first place is illegal.
The FBI and the U.S. Department of Homeland Security sent out joint bulletins in February and March to police departments nationwide warning about the bulk purchase of TracFones for personal profit or financing terrorism, according to FBI agent Mike Brooks and Susan Raber, a spokeswoman for the Ohio Department of Homeland Security.
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Thank you so much. Now we have to "follow the money."
Has someone else found out these phones were hackable from reading the descriptions of procedures in the legal case in which Sol is a defendent? Some articles mentioned a buyer in Dallas and a buyer in Dearborn. Some articles indicate the phones were to be shipped overseas.
In the Sol case the company resold the phones with their packaging, batteries and chargers intact.
I can see a company disscarding the packaging -now- and removing the brand name from the sets since the legal case focuses on the issue of logos and the phones being resold under the plaintiff's corporate name. Perhaps by discarding these things and selling the phone genericly an 'entrepreneur' the folks doing this hope to avoid getting sued.
What I don't see is a company like Sol discarding the battery chargers [the investigators noted that the items were repacked].
Perhaps the chargers and packaging weren't being discarded but just tossed in the same box until after the phones could be unlocked, and press reports weren't clear. These things were found in the vehicles, after all, and not in a dumpster.
I also don't see Sol being interested in flight manifests and airport security information which some defendents apparently had on them. But then, Sol- or whoever is the buyer now- may not concern themselves with how their phone-procurers plan to spend their paychecks.